After some requests to add opportunities on the short side, I have tweaked my model to take advantage of those times when going short makes some sense. If earnings continue to deteriorate as I think they will, there should be some profitable short-side trades ahead. I am looking at two earnings indicators now: One looks at the percentage of stocks in my modified S & P universe that have posted positive comparisons in the latest quarter. That indicator is now bearish. The second indicator compares estimated earnings for the same universe one year ahead with estimated earnings one quarter ago. That indicator is now neutral. Overall, while not the most bearish possible, shorting is now active and going to the long side will require at least improvement in one of those earnings indicators. My sentiment indicators have improved dramatically as the market has suffered and are now bullish. Valuation has also improved but only to the neutral level.. It would require at least an additional 20% decline in stock prices to make my valuation indicator fully positive. My model after revision has been short and remains 30% net short. If one is less adventuresome, my model continues to call for zero stock exposure.